How not to fix a corrupt and incompetent government

The Gauteng Department of Social Development (GDSD) has faced allegations of corruption and incompetence, with numerous forensic audits highlighting irregularities in the funding of social welfare organizations. These organizations, which include old age homes, shelters for abused women, children's homes, drug rehab centers, and soup kitchens, have long relied on the department for funding.

However, in recent years, budget cuts and payment delays have become increasingly common, leading to disruptions in the non-profit sector.

Forensic investigations have cost the department at least R3.2-million, but attempts to address the issues identified have resulted in little change. Instead, they have caused widespread disruption, with the department failing to act on the findings of the investigations. Despite recommendations to blacklist and refer implicated entities for criminal investigation, no action was taken.

One senior official, July Maphosa, was found to have irregularly paid at least R500-million to for-profit companies via non-profit organizations, but no disciplinary action was taken against him or the officials who broke procurement rules.

In 2022, Mbali Hlophe became the MEC of both social development and agriculture. She promised to act on the corruption reports but promised funding to only eight out of hundreds of organizations annually. In 2023, a new forensic investigation was conducted, but the department had already signed contracts with too many organizations, overcommitting its budget. Hlophe then centralized funding decisions, causing major delays and the system collapsing.

In May 2024, 51 organizations were told they would not be funded that year, despite previously being told they would receive funds. They had already committed funds for the new financial year, including for salaries and rental leases. After taking the department to the Gauteng High Court, most were cleared of wrongdoing. The Gauteng Care Crisis Committee (GCCC), a voluntary association of the non-profit organizations which took the department to court, accused Hlophe of misleading the public and spreading lies.

A draft of the FSG Africa report, which vindicates the GCCC's position, has now been obtained by GroundUp.